Standing at the corner of Otey Street and Parramore Avenue, in the middle of a blighted neighborhood too dangerous to walk alone at night, it's hard to imagine $350,000 homes on the 3.5-acre vacant lot here. The property is fenced off to keep hookers and junkies from using it as a place to sleep; trash and used condoms litter the ground.
But if city planners have their way, this chunk of land — called Otey Place — won't be like this much longer. In a few years, it will be home to 38 prefabricated, modular single-family and townhomes and five office condos, and it will become an important element of the city's ongoing efforts to turn this struggling neighborhood around.
"The goal of this development is to recruit current Parramore residents to be homeowners and for residents who have left the neighborhood to come back and rejoin the community," says city spokesperson Heather Allebaugh.
Only that's not going to happen. "A lot of folks in Parramore are not going to be the ones `who` can afford it," says Walter Hawkins, the city-run Community Redevelopment Agency's urban development director, a project supporter. "We have lots of renters, too many renters in that neighborhood and folks can't afford anything major because their incomes haven't gone up."
The CRA spent two decades and more than $1.1 million acquiring this land, demolishing the properties on it and readying it for redevelopment. Twice in the last three years, it has put out requests-for-proposals, or RFPs, seeking development companies to make bids on how to turn this land in the ghetto into a thriving, middle-class subdivision. And finally, earlier this year, the city settled on a developer, PSA Constructors Inc.
What's controversial isn't that the city wants this land developed. That's common sense, given the Dyer administration's push for Parramore's revitalization and the fact that this dirt sits across the street from what Mayor Buddy Dyer hopes will be a massive creative village on the site of what is now the Centroplex. Something needs to happen.
But what's happening, and who's pushing it, bears scrutiny. There's a reason this project is the only one in the city's history to have been unanimously rejected by the CRA's advisory board in March. There's also a reason the city council, acting as the CRA's board of directors, overruled the advisory board on a 4-2 vote in April at the urging of commissioner Daisy Lynum. There's a reason one of the city's most liberal commissioners, Patty Sheehan, is leading a charge against it.
The reason? Taxpayers are about to get screwed, while Lynum's friends are going to make serious coin. This project will do little either to alleviate the city's affordable housing crunch or to elevate the plight of Parramore. The development team has invested almost nothing into this project, and it is sprinting toward the finish line without bothering with such frivolities as a legitimate real-estate market study.
Despite all that, there's a good chance that when it heads to the city council for final approval Dec. 11, it will get a thumbs-up.
In 2003, the city put out its first RFP for Otey Place and got only one response, from Urban Renaissance Development LLC. That company's president is Inez Long, who also ran a city-subsidized nonprofit called the Black Business Investment Fund of Central Florida. (The two companies also share office space.) Lynum volunteers on the BBIF's board of directors, and BBIF was a partner in the deal. URD offered the CRA $1 for the land and sought $2.5 million in subsidies to build out the development. A city selection committee ultimately scrapped it.
The city put out a second RFP in late 2005. Perhaps because the city wanted the bids packaged so close to Christmas, only two companies turned in bids. Of those, the city selection committee chose PSA Constructors, which also had ties to Lynum and BBIF. Lynum is friends with Patrick Aliu, PSA's president, and the BBIF is a partner in this proposal. PSA is also a representative for BBIF in a sweetheart land deal the nonprofit secured from the city in 2005 in Parramore. Lynum, PSA and the BBIF didn't return repeated phone calls.
In March, the CRA advisory board voted unanimously to reject PSA's bid and recommend the city put out yet another RFP. The city staff instead took the matter to the city council April 3, which gave PSA the go-ahead after Lynum, Dyer and a handful of backers so implored them. One after another, the project's supporters repeated that the city needed to honor its promises, and told reluctant commissioners that the holes in PSA's plans would be filled in before the project came back before them.
PSA's proposal has changed a little since it was first pitched. Original plans called for housing sales of almost $500,000, an idea that was laughed at in selection committee meetings earlier this year. Attempting to sell a prefab home in a drug-infested neighborhood for a half-million dollars seemed the height of naiveté, a fact city officials now acknowledge. "The first market study was way off," Hawkins says.
PSA had drawn comparable prices from much better neighborhoods. "You got College Park a mile north of Parramore and those homes can go for a million dollars easy," Hawkins says. "Some of the comps were based on lakefront property. So the numbers weren't realistic at all. And we want to come back with more credible comps on this thing."
Now, according to numbers given to city commissioners last week, PSA plans to sell homes priced between $213,750 and $350,450. Ten of the 38 homes will be considered "affordable," which means they can be priced up to $198,360. A city subsidy to PSA will make up the difference.
"You're telling me $200,000 is affordable housing?" says Sheehan, the District 4 commissioner. "I'm just scratching my head, like, I can't even afford that."
According to city records, a family would have to earn $66,120 to qualify for such a mortgage. The overwhelming majority of Parramore residents don't even come close.
PSA is offering the city more money than URD did: $253,812. The land's appraised value is $797,000 — the market value could be much higher — and the city has pumped more than $1.1 million to date into acquiring the land. That means the city is about to take at least an $800,000 hit.
"The appraised value of the land is almost $800,000 and we're only getting $250,000 back?" Sheehan asks. "It's absurdly cheap, but the houses are going to sell from $215,000 to $350,000 apiece. We're allowing them to put up prefab homes and there's no benefit to the residents of the community, who could help build it themselves. `PSA` is saving money by doing this, but what does the city get out of it? There's absolutely no way that I'm going to vote for this."
City documents say the project will be worth $7.8 million. CRA project manager Joyce Sellen says PSA's profit margin will be 18 percent, or more than $1.4 million.
Why is the city letting itself get lowballed? "There have to be incentives for doing this project," Sellen says. "Because if it were not for the incentives, this project would not be getting done."
That's because the city is committed to allowing only low-density developments west of Parramore Avenue — except for BBIF's development at Parramore Avenue and West Church Street, which has a significantly higher zoning — which means lower profits and requires more city handouts. It also limits the possibility for more affordably priced units.
"I think a lot of people would want to develop there if they weren't forced to develop something that won't work," says Phil Cowherd, a frequent city critic and real-estate agent whose office is in Parramore. "If they developed something like CityView `an apartment building on West Church Street` at that site it would work, and they'd have lots of developers interested."
"Throw this proposal back out and you can make 10 times this amount of money building the right thing," says David van Gelder, a Lynum antagonist who controls property adjacent to Otey Place. "And with higher density, they could offer more affordable housing that's greatly needed."
PSA's housing prices could still fluctuate after the city council approves the developer's agreement. According to the proposed contract, PSA would have 45 days to conduct a market study — a realistic one, this time — after executing the contract.
In January, at a selection committee meeting, city officials said they expected PSA to have completed a site plan detailing where all of its units will go and where the affordable units will be placed by the time that company made its presentation in February. PSA finally finished its bare-bones site plan in November, according to documents obtained by Orlando Weekly. That plan features colored-in red-and-grey boxes to indicate where the homes will be placed. Apparently, based on a draft of the developer's agreement, the city didn't want PSA to do any heavy lifting before the contract was inked, because the city won't require PSA to turn in detailed-enough plans to "determine if the plans and specifications are consistent" with what the city wants from the development until afterward.
PSA also doesn't have to take any risk. After the contract is signed, it has a year to "review and examine" the land, and decide whether or not it writes the city a check. If PSA conducts a market study and decides it won't make enough money, it can bail without penalty, as the contract also has a clause that essentially allows either party to wash their hands of the deal for any reason whatsoever.
Maybe if other would-be developers knew how easy the city would make it on the Otey Place builder, the city would have gotten more attractive bids. As it is, the city's stuck with two choices: Approve a bad deal, or scrap the whole thing and start over.
"It's absurd `PSA` has even made it this far," Sheehan email@example.com